Malaysia: MISC May Bid for Maersk LNG Fleet

National carrier MISC Bhd may put in a bid for a fleet of eight liquefied natural gas (LNG) ships owned by shipping giant AP Moller Maersk, international shipping publications speculated last week.

The bids are understood to be due by end-August, with initial estimates valuing the fleet at US$1.3 billion (RM3.9 billion) to US$1.7 billion. AP Moller is understood to have roped in Deutsche Bank to assist with the sale.

Late last week, shipping publication Tradewinds, quoting industry sources said four to seven offers have already been made for Maersk’s fleet of LNG ships, but details were kept “strictly under wraps”.

The bidding is likely to be a competitive affair with many large companies looking to partake in the sale.

According to Tradewinds, MISC has roped in Japanese giant Mitsui & Co for a possible joint bid.

MISC has a fleet of some 180 ships, with about 60 vessels chartered from other owners. Out of this fleet MISC has 29 LNG carriers, which are all owned by the national carrier.

Considering MISC is 62.7% owned by state controlled oil major Petroliam Nasional Bhd (Petronas), and the national carrier is the shipping arm of the oil giant, the acquisition makes sense.

Petronas is in the process of setting up an import or re-gasification terminal for LNG at Sungai Udang Melaka at a cost of RM3 billion. This initiative to import LNG could require more vessels on MISC’s part.

For FY11 ended March, MISC posted a net profit of RM1.87 billion on the back of RM12.32 billion in revenue. During the year in review, MISC’s earnings per share was 41.9 sen.

As at end March, the shipping company had RM3.35 billion in cash, while on the other side of the balance sheet, the company’s long-term debts amounted to RM10 billion and its short-term commitments stood at RM1.25 billion. The company’s shareholders’ funds as at end-March were RM23.07 billion.

MISC ended trading last Friday at RM6.90, gaining 10 sen.

Another shipping giant Mitsui OSK Lines (commonly known as MOL) is also said to have expressed interest in Maersk’s fleet of LNG carriers.

Despite the similarity in name, Mitsui & Co and MOL do not any ties in terms of having similar shareholders.

Another Japanese outfit, Marubeni, is understood to be partnering Canadian shipping outfit Teekay Corp and seems likely to join in the race. Both companies have expressed an interest to grow their LNG-shipping assets.

Three other names that have cropped up include Russian giants Sovcomflot, GasLog of Greece and tycoon John Fredriksen​’s Golar LNG. GasLog’s current CEO Jeppe Jensen was formerly head of Maersk LNG, and ordered the ships that are now being sold.

In 2009, Fredriksen was ranked the 132nd richest individual in the world and is said to be worth more than US$4 billion.

Sovcomflot is Russia’s largest shipping company and is wholly owned by the state.

About 20 companies are understood to have shown interest, but those keen on buying the ships, taking the tender documents, have had to sign several confidentiality agreements.

However, there could be hurdles for the buyers of three of the eight vessels, as oil major Total has to approve the charters on these ships currently servicing Yemen’s LNG project, financed under a French tax lease.

(theedgemalaysia)

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Source: theedgemalaysia, August 15, 2011; Image: maersk lng